By paying a higher-than-market wage, a firm can avoid the problem of
a. reputation as hostage
b. moral hazard
c. the winner's curse
d. adverse selection
e. symmetrical information
D
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A perfectly competitive firm definitely makes an economic profit in the short run if price is
A) equal to marginal cost. B) equal to average total cost. C) greater than average total cost. D) greater than marginal cost. E) greater than average variable cost.
Vault cash is equal to $8 million, deposits by depository institutions at the central bank are $2 million, the monetary base is $30 million, and bank deposits are $100 million. The money multiplier is equal to
A) 2.5. B) 3.0. C) 4.0. D) 5.0.
If the monetary authorities want to reduce the monetary multiplier, they should:
A. increase bank reserves. B. lower the legal reserve ratio. C. lower interest rates. D. raise the legal reserve ratio.
The greater the elasticity of supply of and demand for a good, the:
A. smaller will be the efficiency loss of an excise tax on the good. B. more likely the good will be a public good rather than a private good. C. larger will be the efficiency loss of an excise tax on the good. D. larger will be the proportion of an excise tax on the good that will be shifted forward to consumers.